How We Make Tax
Simple for Offshore Workers

To be eligible for the Seafarers Earnings Deduction (SED), you need to satisfy certain HMRC requirements. The main criteria are:

Being employed to work aboard a ship

Calling at a minimum of one foreign port during your employment

Spending a minimum of 183 days outside the UK within a qualifying period

Being resident in the UK or EEA

You won’t be eligible if you:

Work as a Crown employee (for instance, in the Royal Navy or Border Force)

Aren’t resident in the UK or an EEA country

Don’t spend sufficient time outside the UK

Breach the “half-day” rule by being in the UK too frequently

Each of these requirements is explained in greater detail below.

1. You need to be employed on a ship

SED eligibility requires you to be working aboard a vessel such as a superyacht or cruise liner.

Offshore installations within the oil and gas sector aren’t classified as ships for SED purposes. This covers:

Fixed or floating production platforms

Floating storage units

FPSOs (floating production storage and offloading vessels)

Mobile offshore drilling units

Flotels

2. You need to call at a foreign port during each period of employment

For an SED claim, at least one voyage within your qualifying period needs to start or finish at a foreign port.

This confirms your work takes place wholly or partly outside the UK. Essentially, you’ll need to complete a voyage to or from a foreign port in each tax year you’re claiming.

3. You need to establish a qualifying period

This tends to be the most complex aspect of SED, largely because of the half-day rule, though it’s easier to understand when broken into steps.

HMRC defines an eligible period as 365 days or longer. Your first claim can only be made once this period is complete. Crucially, the majority of this time needs to be spent outside the UK.

The most straightforward approach is spending at least 183 days outside the UK during a 365-day window. A day qualifies as being outside the UK if you’re not present at midnight, and non-working days abroad count too.

You’re permitted to return to the UK during your qualifying period, provided you follow these guidelines:

No individual UK visit can last more than 183 consecutive days

You need to spend over half your total eligible period outside the UK — this is the half-day rule

If you breach the half-day rule, your eligible period becomes invalid, which means your claim ends and you’ll need to begin again. Adhering to these guidelines carefully ensures continued SED eligibility.

4. You need to be a UK or EEA resident

SED eligibility requires you to be either a UK resident or tax resident in another European Economic Area (EEA) country.

For UK residents, you’ll need to register for self-assessment and file a tax return declaring your income for the relevant tax year.

For EEA residents, SED can be claimed using the R43M (SED) Repayment Claim Form.

Satisfying this residency criterion is essential for a valid claim.

You can claim the SED through a UK tax return — something we have considerable expertise in.

If you haven’t submitted a UK tax return previously, you’ll first need to obtain a unique taxpayer reference (UTR) number, which registers you for self-assessment. We manage this application on your behalf to make sure everything is completed accurately.

Once you’ve provided us with the necessary details about your income for the tax year, we’ll prepare your tax return and send it to you for approval.

If you’re not a UK resident but meet the SED criteria and want to reclaim income tax, the process works differently. You’ll need to complete the R43M(SED) form, which can be done online or by post to HMRC. To process your claim, HMRC will need proof of your time spent outside the UK, so make sure you have your ship’s logs or flight records to hand before starting.

While we don’t need copies of these documents to complete your tax return and claim the Seafarers Earnings Deduction, it’s worth keeping them on file. In the unlikely event that HMRC requests evidence to support your SED claim, you’ll have everything ready.

Documents worth retaining include:

Your discharge book

Flight records or boarding passes

Payslips

Seafarers Employment Agreements (SEA) or other contracts of employment

Bank statements

For new customers, the full process typically takes 4–6 weeks. Much of this time is spent waiting for HMRC correspondence to arrive at your registered address. If you’ve used us before, things move considerably faster.

New customers

If this is your first time making a claim, here’s what to expect:

Set up a Personal Tax Account — You’ll need to register with HMRC online to manage your tax affairs. This takes around 10 minutes.

Apply for a UTR (Unique Taxpayer Reference) number — This usually takes 2–3 weeks to arrive by post.

Authorise us as your tax agent — Once we have your UTR, we’ll apply to act on your behalf. HMRC will send an authorisation code to your registered address, which can take up to 4 weeks.

Prepare your information in the meantime — While waiting for the authorisation code, you can submit your earnings and travel dates through our online forms so everything’s ready to go.

Submit your tax return — As soon as we’re authorised, everything is in place, and you’ve approved our calculations, we’ll file your return.

Returning customers

If you’ve worked with Flying Fish previously, the process is much quicker. Simply send us your latest earnings and travel history and we can begin straightaway — there’s no need to repeat any of the initial setup.

This isn’t an issue at all. As you’re probably aware, you’re entitled to spend just under half your time in the UK, and there’s nothing preventing you from working here or elsewhere when you’re not employed on a vessel.

Although this income won’t qualify for the deduction, you’re still entitled to your tax-free personal allowance. This means a portion of your earnings can be declared without any tax being due. We’ll make sure both are handled correctly.

Each Tax Year, HMRC allow a window between the 6th April and 31st January for filing the previous tax years’ return. 

Once you’ve established a qualifying period that extends beyond 365 days, your “anniversary date” becomes less important as the half-day rule (explained above) takes over.

However, having seen contradictory advice from other accountants online, we’ve confirmed directly with HMRC that to establish your initial 365-day qualifying period, you must be outside the UK at midnight on day 365.

For example, if you start working on a yacht on 1st January, you would need to be outside the UK at midnight on the following 31st December to establish a valid claim period.

The UK tax year runs from 6th April to 5th April the following year.

Since the introduction of the Automatic Exchange of Information (AEoI), which enables tax authorities to request income details directly from your bank, it’s essential that all earnings between these dates are included in your tax return.

Our fees are clear and agreed upfront. No hidden charges. Contact us directly for fixed pricing.